All You Need To Know About Offshore Software Development

Offshore Software Development

Last Updated on January 6, 2023 by Team Experts

Offshore software development has clear advantages on all fronts. Believe it or not, it brings a lot to the table, from qualified developers to affordable yet quality software development. It’s a heavenly place for all kinds of software development practices.

It covers everything from developing software products ahead of deadlines to staff management and technical difficulties. Hence a client company doesn’t need to do everything by itself when handing over a portion of duties to its subsidiary offshore software development specialists.

It’s quite a trending topic nowadays, with experts predicting the worldwide IT outsourcing market to obtain $425.19 billion in revenue by the end of 2026.

Let’s get some more insight and learn everything about offshore software development in this article.

Offshore Software Development

When software development was new to the world, every software company used to build its software with its in-house development team, which was a reliable method. But as the recession went on, the salaries of these employees surged to a new level.

This is where the concept of offshore development merged, where companies opened their subsidiaries in a third-world country where they could assign their projects to a dedicated team based on specific requirements.

Since the subsidiary is a part of its company, the client was able to control product development phases to some extent, and since the subsidiary resided in a third-world nation, the client was able to make a huge profit by spending less on labor costs.

To sum it up, offshore software development is the practice of handing over software projects to a subsidiary vendor located in a different part of the world, where the client can get reasonably priced product development without compromising on its quality.

Offshore Vs Onshore Vs Nearshore

People often misunderstand these terms entirely, so let’s shed some light to get a clear picture.

Offshore– The subsidiary vendor operates far away from an offshore location.

Onshore– The third-party/subsidiary vendor operates from the same region where a client is located.

Nearshore– The third-party/subsidiary vendor operates from the clients’ nearby country.

Offshore Vs Outsource

People often use both terms interchangeably without realizing how they work.

Offshore is a part of services where a company relies on its subsidiary, which is located far away from its headquarters in a different part of the world and whose expertise is geared toward a specific project requirement.

On the other hand, outsourcing is nothing more than joining hands with an anonymous IT firm and allowing the company to take full control of your product development.

Both approaches are popular, and reliable, with interesting benefits such as quality product development at a reasonable price.

However, the choice of choosing either of these comes down to a client’s needs and project requirements.

For instance, in offshore product development, the client gets to be involved in every phase of product development and, to some extent, has control over the development cycle.

Whereas, in outsourcing, it is not possible to control or get involved in the development cycle, since the client doesn’t want to go through the hassles of any project management.

Why Choose Offshore Software Development

To clarify the rising demand for offshore software development, we have to make some points crystal clear.


In-house teams are not reliable assets for quality software development anymore. They are expensive because of their salaries, and they may be filled with junior roles that are incompatible with the project you want to work on.

On top of it, in-house developers require additional perks such as insurance, transportation perks, and other benefits, which makes them a costly choice for any type of software development.

On the other hand, you don’t have to worry about costs and additional perks while offshoring since the cost is lower, and the offshore software development subsidiary takes care of their developer’s compensation.

Rapid Development

It’s likely that when you join hands with an offshore development company, you will experience a short turnaround. Because the offshore partner dedicates a team of professionals who rigorously work on each phase of your software product to take it from the ground and turn it into a fully-functional application in a matter of weeks.

Moreover, if needed, they utilize other professionals to optimize the speed of product development to deploy solutions ahead of deadlines.


Since the offshore software development you choose will be a subsidiary, a client gets to control all the elements of your product development, such as assessing development plans, designs, and testing procedures to ensure the product stays agile without any defects.

Moreover, a client can give the necessary feedback to change any aspects of a product, such as new features or functionality.

Low Risk

The offshore development company is a team of professionals with years of experience in developing agile software solutions. They make sure the product has no vulnerabilities to today’s malicious activities and perform standardized quality checks to secure products with the latest security patches.

With such expertise, a client can expect a robust and fully functional product, ready to integrate with their business operations without worrying about any risks.

When to Choose Offshore Software Development

Just like you choose to take a break when feeling exhausted, similarly, you have to choose offshore software development when your requirements align with the following statements.

When The Budget is Tight 

It’s hard for small businesses and startups to afford software development services as their prices are always high. In such a case, it’s a wise decision to rely on offshore development, which promises to offer a quality product at a reasonable price.

When In-House Team Lacks A Particular Skill

In-house teams are not the best solutions for each and every development type.

Eventually, a client will come around with a project that requires some additional technologies that their team lacks. Here, utilizing offshore development practices can promise a great advantage since the client can choose the company that specializes only in that field of development.

When There is A Need For Technical Elites 

It’s hard to build complex solutions and huge projects like neural engine-based applications, kernel building, or any digital solution just by relying on in-house developers.

Instead, clients can join forces with offshore development companies and have both in-house and elite developers shoulder the critical responsibilities of the project to get it fully functional ahead of the deadline.

When In Need To Speed Up Development

Speedy development is needed in today’s fast pacing world. The clients need the solution ready within weeks to start with their marketing and other strategies, which is why relying on offshore development is among the best things to do.

The company can understand every aspect of the product within a short period and begin supporting and enhancing each phase of development for greater efficiency.

When in Need of Flexibility

Offshore companies work on contracts to develop software, once the contract is over, the client can move on with its other responsibilities. This means the clients get flexibility in working with offshore companies when there is a requirement. It’s much better than hiring freelancers to get a job done since two or three freelancers won’t be able to cover all the aspects of the project.

The Challenges

Let’s not forget that if a company will operate from an offshore location, then there will be some consequences, and among those are as follows.

Time Zone Difference

One of the most common issues when outsourcing projects to an offshore development company is time zone differences. A client may not get important updates on software development phases just because of the difference in timezone.

Moreover, the development may get delayed if the company needs feedback from the client on a critical checkpoint.

Communication Barriers

Another thing that needs to be addressed is the communication barrier. Due to long distances, some uncertainties might end up in communication channels, causing both parties to misunderstand the terms and updates on any development phases. 

Poor Control 

Though control over development is among the strong points of offshore software development. If the client picks the wrong development company or a company with cultural differences, the chances of losing control over the development process increase. This could lead the product down a deceptive path.


Offshore software development is a great way to save money while still getting quality solutions. Moreover, offshore software development puts a lot more things on the table, like security, flawless integration, and superior control over development phases.

Again, it’s a good approach to saving resources and maximizing output to obtain agile solutions. However, the challenges need to be addressed while working with an offshore company, to ensure flawless engagement with the utmost transparency and trust.

Read more: Offshore Outsourcing: Recruiting and Handling an Efficient Team

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Anil is an enthusiastic, self-motivated, reliable person who is a Technology evangelist. He's always been fascinated at work especially at innovation that causes benefit to the students, working professionals or the companies. Being unique and thinking Innovative is what he loves the most, supporting his thoughts he will be ahead for any change valuing social responsibility with a reprising innovation. His interest in various fields and the urge to explore, led him to find places to put himself to work and design things than just learning. Follow him on LinkedIn

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